There’s this episode of the endlessly smart “30 Rock” where the group is about to sing “Happy Birthday” at an office party.
One of the characters interrupts to chime in, “Did you know that if you sing ‘Happy Birthday’ on a TV show – you have to pay for it? – I did not know that.”
It’s a nice meta-joke that saved the show a few bucks.
Despite its popularity, the song was not public domain – meaning the people who wrote it collected royalties anytime it was played in public or broadcast. (This is also why the “Happy Birthday” does not appear in the LDS children’s songbook.) It made its writers an estimated $2 million in royalties per year.
This is the kind of thing that just happens in the background that most of us don’t think about, like when we walk into a store, elevator, or restaurant and hear – say – Air Supply’s “All Out of Love” playing softly in the background. If we stopped to think about it, we’d realize that 1) Air Supply is making a little money off of this, 2) the store is paying a little bit, and 3) someone in the middle is probably making sure this happens while taking a little slice for themselves. But usually we just go about our shopping and assume that the world is taking care of itself.
And it will, but this small part of the world needs a little bit of help from Mike Lee.
The middlemen in this scenario are the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), two groups that license approximately 90 percent of songs. To play music in public, small businesses must buy authorizations from ASCAP or BMI. But because of their market domination, they are in a position to exploit small businesses with prices above reasonable market rates. Unfortunately, this is money that the typical songwriters will never see.
ASCAP and BMI didn’t achieve their dominant market position through innovating on their own – the way Google did by pioneering the search engine – they got it by successfully manipulating government copyright laws a long time ago.
So to rein them in, the federal government came up with a solution: antitrust consent decrees, agreements with the Department of Justice (DOJ) that require them to provide blanket licenses at fair market rates. This was back in 1941, because they had been colluding to hike prices on like restaurants, bars, and mom & pop stores.
This issue has come up more in the press recently since the DOJ announced it was reviewing the nation's 1,300 antitrust consent decrees. Probably a good idea since some of them surely are over-reaches of federal power, but the ones regulating ASCAP/BMI aren’t.
These consent decrees need to stay in place.
While Sen. Orrin Hatch is usually the member of the Utah delegation that gets attention on music issues, here Sen. Lee is at the tip of the spear as the chair of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights. In 2015, he held a hearing about the issue which presaged Obama’s DOJ keeping the ASCAP/BMI consent decrees unchanged.
Praising them for their decision on this non-partisan issue, Lee said, “Any government oversight of this market must encourage creativity by recognizing the value of copyrights and ensure that prices for music remain competitive for consumers.”
While the political right is more likely to say, “The government should just get out of the way and let the market handle this” – and in many cases this is correct – there is a history of conservative leaders stepping in appropriately when traditional market forces are compromised: President Teddy Roosevelt famously declared war against trusts, and more recently the Reagan Administration broke up AT&T. We have a duopoly here that lends itself to price gouging, so the federal government has a role to play.
The consent decrees were designed to keep the balance between small businesses and songwriters. What we need here is for a conservative leader to maintain the status quo (which contrary to the daily protests you see in the news is mostly pretty good).
These consent decrees balance our nation’s commitment to copyright laws while protecting small businesses from exploitative practices. Supporting intellectual property has long been one of America’s hallmarks for innovation. It may seem weird that “Happy Birthday” could generate $2 million a year for its songwriters, but if you’d written that and millions of people had benefited from it, you’d probably be OK with the compensation, noting that the song went into the public domain in 2016. (But Air Supply is probably better for background music.)